Maine’s universal healthcare program saves so much money, they have to raise taxes! Huh?

That’s right! Maine’s newly instituted “Dirigo” healthcare program has saved the state so much money, they will be instituting a new tax called the “Savings Offset Payment” (SOP) in order to recover every dollar the state has saved.

The Wall Street Journal published an Op-Ed stating:

The Dirigo board is levying a Savings Offset Payment, or SOP--a remarkably innovative name for a new claims tax--to "recover" every dollar that the state says it has "saved."

This SOP is similar to a sales tax; a 2.4% surcharge is added to all paid health-care claims. When applied, this new tax will cost the average individual about $70 and the average family about $200 a year--at a time when most individual insurance policyholders are already absorbing a 16% increase in their insurance premiums.
But, you may ask, if the program is saving all this money, why is a new tax necessary? The answer is that without the SOP, Dirigo Health's high costs would bankrupt the program.

The SOP, effective last month, applies only to individuals, small businesses and other businesses buying health insurance from a Maine insurer or using a third-party administrator. By raising insurance costs, this tax may end up compelling some individuals to drop their coverage. But, hey, maybe they too can get subsidized coverage under Dirigo.

The reality is that this program doesn’t save taxpayers a dime! What does do is encourage those who can already afford and are paying for health insurance to drop their existing coverage in favor of the cheaper subsidized state program. But keep in mind, the reason it is cheaper is because those who are not part of the state program are the ones subsidizing those who are.

If Dirigo truly saved money, the program's benefits would exceed its costs. Elementary math indicates that this is not the case; every dollar questionably identified by the state as having been "saved" is taken from consumers thanks to the SOP. Perhaps not surprisingly, several other states are asking whether Maine's Dirigo Health could be a model for them. It could, if they too want to increase taxes, meanwhile doing virtually nothing to help the uninsured.

This “Money Saving”, “Tax Raising” Universal Healthcare scam is headed to a liberal state near you!

Craig DeLuz

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